'Bureaus not allowed to transact with corporates'

Published: 05 October 2019

Bureaux de Change are not allowed to transact with corporates or enter into twining arrangements with customers to prefund foreign currency purchases, according to a directive from the Reserve Bank of Zimbabwe released to industry players last Friday.

The directive, which was issued by the central bank's director exchange control Farai Masendu, is meant to operationalise measures announced on September 20, 2019 that were meant to refine operations of Bureaux de Change. The directive was issued in terms of section 35 (1) of the exchange control regulations statutory instrument 109 of 1996.

The new measures and the subsequent directive came after foreign currency exchange rates for the local dollar had plummeted with bureaux de change offering rates that were significantly ahead of those on the interbank market.

This saw the central bank directing bureaux de change to limit their margins to 7 percent of the interbank mid-rate.

Players operating bureaux de change are also only allowed to buy foreign currency from individuals only and sell to individuals for foreign personal travel only. The central bank also said bureaux de change must restrict their transactions to individuals and must not transact with corporates.

"For the avoidance of doubt, bureaux de change shall not transact with corporates and small to medium enterprises (SMEs) or sell foreign currency for Business Travel Allowance," reads the directive.

The directive comes as local retailers acquired licences to offer bureaux de change services. Pick n' Pay, acquired one through its MyCash brand while OK Zimbabwe also offer bureaux de change services under its Money Wave financial services.

Doves also now runs a bureaux de change. The directive also forbids bureaux de change from buying foreign currency using physical cash. Players in the sector are also only allowed to keep a float of not more than an aggregate of US$20,000 while any excess amounts should be sold to an Authorised Dealer within 24 hours.

The directive is part of the measures that are meant to bring sanity on the operations of the bureaux de change as well as the trading of foreign currency in the country.

A week or so ago, the central bank froze bank accounts belonging to the country's biggest fuel supplier, as well as the largest car dealership, in what is believed to be efforts to stabilise the plunging currency.

Officially, Zimbabwe's local dollar has lost more than 83 percent of its value since February — but the black market rates show an even larger decline. - ebusiness